Embracing Idleness
Jul. 17th, 2012 11:43 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
snousleI should have been a real economist - I am too readily drawn to speculation outside the range of my expertise, and cannot resist sharing it. Reading journal articles and economics blogs is educational, but also in some sense frustrating, since those with a solid background in the subject have access to models and modes of thinking that I just don't know enough about.
What I want to say to them is, what if productivity and economic growth is not the goal, but is actually the problem? I've touched on this in the past, but what it comes down to is that I'm thinking that the American economy is now so efficient that it just doesn't need people anymore. Remember the society of the future, where we would all have four hour workdays? This generally doesn't work, because two half-time employees always cost more than one full-time employee. So in an environment where everything is made by robots and there's an inescapable excess of labor, you'll always have unemployment, perhaps resulting in a death-spiral of ever-sinking demand.
I know one conservative person who openly wishes he could turn the clock back to 1970. Well, total per-capita economic output back then was less than half of what it is now. So we have a bit of a paradox - in some sense, the country was "better" at half its current productivity, yet if productivity dropped by half today it would be considered an unprecedented disaster.
Well, why not re-think this a bit. Suppose life was better at half speed. Maybe the question is not how to grow the economy, but how to shrink it gracefully. And maybe the way to do that is to embrace idleness - to make unemployment a genuinely attractive alternative to working, while at the same time making the barriers to productive work more readily surmountable.
If there are two words worth listening to from conservative economists, they are "incentives matter". No economy runs on individual goodwill or "ethical" behavior - those are mere fantasies. Unfortunately, Americans are incredibly stingy about "welfare" and get outraged when someone collects a check that they don't "need" or "deserve". The result is that the marginal incentive to work is eliminated; by demanding that workers be, say, fully disabled in order to recieve a government check, you're eliminating the possibility of disabled persons being in any way productive. So of course it's a disaster. I know all kinds of disabled people who would like to work at something, but can't, because they literally cannot afford to.
I think there's a way to embrace labor-eliminating technologies, reap their economic benefits, and overcome the death-spiral of excess productivity without the carnage and heartache we see today, but it requires thinking differently about taxation and redistribution.
Imagine a system with no revenue source other than a 50% value-added tax, half of which pays for the usual government functions like infrastructure, defense, et cetra, without any welfare component, while the other half is automatically redistributed in the form of a monthly check to everyone over the age of 16. This solves several problems at once:
- All welfare programs, including Social Security and Medicare, along with their waste, corruption, graft, and politically volatile administrative problems, would be eliminated in favor of direct cash subsidies of about $800/month. Instead of patronizing, controversial programs that try to control people's choices while stomping all over their personal values, recipients are free to choose whatever things benefit them the most. Any given person's answer might be "spend it all on booze and prostitutes", but hey, that's their choice. Instead of creating opportunities for government contractors to corrupt their political benefactors, it would use the power of the market to slash waste and inefficiency. In many parts of the country, you can live pretty darned comfortably on a subsidy of that size.
- Subsidies would not be fixed, but would be set at an immutable rate of 50% of government revenue, divided across the whole adult population. When the economy suffers, everyone shares that pain equally. (In practice, it could be arranged so you'd know what your subsidy would be a year in advance, which would help people plan for the effects of downturns while automatically putting a Keynesian damper on the business cycle.)
- Incentives are preserved. Barriers to work, which today come in the form of "means tests" that frequently result in 100% effective marginal tax rates, would be eliminated. Everyone would have an equal incentive to get off their butts and do something, however little it might pay. Employers no longer have to deal with so many complicated labor laws and can hire people on a whim. Individuals can join up to form companies with much less hassle.
- Liberals get the progressive taxation they want; combining a big subsidy with a big tax, the overall effective tax rate varies from negative, to zero, to very high indeed as you increase your earning power.
- Conservatives get the flat tax they want; the crazy tax code is reduced to a single, easily administered and uncontroversial collection mechanism affecting only businesses, not individuals. Every tax impinges on marginal incentives to productivity; under this system, that impingement is fairly and transparently distributed across rich and poor alike.
- Unemployment is no longer a disaster, but a built-in feature of the system; it is recognized that in our super-productive society, full employment is not achievable, necessary, or even desirable. The economy supports and encourages both productivity and idleness. The four-hour workweek becomes much more practical, perhaps by encouraging early retirement rather than shorter hours.
- There is no longer any such thing as "welfare fraud", or "not deserving" the subsidy, because it's not framed as welfare, it's a negative tax.
The one twist I would put on this would be that subsidy payments must never be garnished or diverted; they belong to the recipient first, and the government should not make any effort to divert it to creditors. The result of this is that it would not be possible to borrow against one's future subsidy checks, and that's a good thing. This is necessary because, frankly, too many people are willing to sell themselves into slavery for a few trinkets.
Is this really so hard? This could be implemented today, in a revenue-neutral fashion, and I bet it would work like a charm.
What I want to say to them is, what if productivity and economic growth is not the goal, but is actually the problem? I've touched on this in the past, but what it comes down to is that I'm thinking that the American economy is now so efficient that it just doesn't need people anymore. Remember the society of the future, where we would all have four hour workdays? This generally doesn't work, because two half-time employees always cost more than one full-time employee. So in an environment where everything is made by robots and there's an inescapable excess of labor, you'll always have unemployment, perhaps resulting in a death-spiral of ever-sinking demand.
I know one conservative person who openly wishes he could turn the clock back to 1970. Well, total per-capita economic output back then was less than half of what it is now. So we have a bit of a paradox - in some sense, the country was "better" at half its current productivity, yet if productivity dropped by half today it would be considered an unprecedented disaster.
Well, why not re-think this a bit. Suppose life was better at half speed. Maybe the question is not how to grow the economy, but how to shrink it gracefully. And maybe the way to do that is to embrace idleness - to make unemployment a genuinely attractive alternative to working, while at the same time making the barriers to productive work more readily surmountable.
If there are two words worth listening to from conservative economists, they are "incentives matter". No economy runs on individual goodwill or "ethical" behavior - those are mere fantasies. Unfortunately, Americans are incredibly stingy about "welfare" and get outraged when someone collects a check that they don't "need" or "deserve". The result is that the marginal incentive to work is eliminated; by demanding that workers be, say, fully disabled in order to recieve a government check, you're eliminating the possibility of disabled persons being in any way productive. So of course it's a disaster. I know all kinds of disabled people who would like to work at something, but can't, because they literally cannot afford to.
I think there's a way to embrace labor-eliminating technologies, reap their economic benefits, and overcome the death-spiral of excess productivity without the carnage and heartache we see today, but it requires thinking differently about taxation and redistribution.
Imagine a system with no revenue source other than a 50% value-added tax, half of which pays for the usual government functions like infrastructure, defense, et cetra, without any welfare component, while the other half is automatically redistributed in the form of a monthly check to everyone over the age of 16. This solves several problems at once:
- All welfare programs, including Social Security and Medicare, along with their waste, corruption, graft, and politically volatile administrative problems, would be eliminated in favor of direct cash subsidies of about $800/month. Instead of patronizing, controversial programs that try to control people's choices while stomping all over their personal values, recipients are free to choose whatever things benefit them the most. Any given person's answer might be "spend it all on booze and prostitutes", but hey, that's their choice. Instead of creating opportunities for government contractors to corrupt their political benefactors, it would use the power of the market to slash waste and inefficiency. In many parts of the country, you can live pretty darned comfortably on a subsidy of that size.
- Subsidies would not be fixed, but would be set at an immutable rate of 50% of government revenue, divided across the whole adult population. When the economy suffers, everyone shares that pain equally. (In practice, it could be arranged so you'd know what your subsidy would be a year in advance, which would help people plan for the effects of downturns while automatically putting a Keynesian damper on the business cycle.)
- Incentives are preserved. Barriers to work, which today come in the form of "means tests" that frequently result in 100% effective marginal tax rates, would be eliminated. Everyone would have an equal incentive to get off their butts and do something, however little it might pay. Employers no longer have to deal with so many complicated labor laws and can hire people on a whim. Individuals can join up to form companies with much less hassle.
- Liberals get the progressive taxation they want; combining a big subsidy with a big tax, the overall effective tax rate varies from negative, to zero, to very high indeed as you increase your earning power.
- Conservatives get the flat tax they want; the crazy tax code is reduced to a single, easily administered and uncontroversial collection mechanism affecting only businesses, not individuals. Every tax impinges on marginal incentives to productivity; under this system, that impingement is fairly and transparently distributed across rich and poor alike.
- Unemployment is no longer a disaster, but a built-in feature of the system; it is recognized that in our super-productive society, full employment is not achievable, necessary, or even desirable. The economy supports and encourages both productivity and idleness. The four-hour workweek becomes much more practical, perhaps by encouraging early retirement rather than shorter hours.
- There is no longer any such thing as "welfare fraud", or "not deserving" the subsidy, because it's not framed as welfare, it's a negative tax.
The one twist I would put on this would be that subsidy payments must never be garnished or diverted; they belong to the recipient first, and the government should not make any effort to divert it to creditors. The result of this is that it would not be possible to borrow against one's future subsidy checks, and that's a good thing. This is necessary because, frankly, too many people are willing to sell themselves into slavery for a few trinkets.
Is this really so hard? This could be implemented today, in a revenue-neutral fashion, and I bet it would work like a charm.
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no subject
Date: 2012-07-17 07:02 pm (UTC)Have you read Aldous Huxley, _Brave New World_? he though it through pretty far. Instead of giving people money, every service they might need is provided free of charge. Housing, medical, food, transport, jobs if they want one, etc. People who work are rewarded directly with (administrative) power instead of money.
Also Philip José Farmer, _Rider of the Purple Wage_, although written in a trippy idiom, looks at the same set of issue.
no subject
Date: 2012-07-17 07:23 pm (UTC)Otherwise, you're dismissing a system that would be in almost every way more generous to the indigent than any welfare state in the world today. I'm proposing an overall increase in redistribution, not a decrease. The whole point is to ensure that "grinding poverty" no longer exists at all.
no subject
Date: 2012-07-17 08:40 pm (UTC)How would you fund/care for/account for children?
(Also I'm totally serious about Huxley, he meant the book as a piece of economic/social engineering not just a fun romp.)
no subject
Date: 2012-07-17 09:19 pm (UTC)Lest this appear as a slide into outright liberalism, medical care is a special case, in the same category as national defense. (The market can't protect us from tuberculosis any more than it can protect us from an invading army). And including health care does affect the percentage of revenue that is optimal for a subsidy. I don't know what that fraction is exactly, but 50% split between the subsidy and a basic medical/educational program would be reasonable. (Modern medical care in most countries is about 10% of GDP, the US being much higher than that. I say set it at 10% by fiat.)
Free-market medicine certainly has its problems but a rationally managed public health system would have to make so many widlly unpopular choices that I'm not sure it's workable in the US. (One of many issues that makes this thought experiment a non-starter in the real world.)
Otherwise, I would point you towards soft paternalism as a suitable and certifiably libertarian framework for influencing public choice where necessary.
I haven't read BNW for a long time. But I do consider dissatisfaction to be an essential part of the human experience, and a world without dissatisfaction is a world without motivation, which would be rather pointless.
Is it possible that the net amount of suffering a human being undergoes is fixed, and that eliminating the physical "sources" of suffering just leaves existential angst to fill the void? I don't think this idea is 100% true, but in the US maybe it's about 75% true. The more experience I have with people in poverty the more I realize it has almost nothing to do with money, and no reasonable amount of money, professional servces, or material goods can fix people's lives when they're broken. You need an actual community.
no subject
Date: 2012-07-17 10:00 pm (UTC)The thing you say about poverty ... I want to both agree and disagree. I grew up there, and most of your time is spent worrying about having enough for housing and food; and the sudden appearance of piles of cash does indeed remove that worry. When that does happen the object of worry is quickly replaced by something else ... having the *right* shoes, defending your stash from your neighbours, etc. But that is never a worry on the same level as - will I have enough to feed the kids. It just isn't. Once you have the basic necessities covered, you then have the luxury of devoting resources to problems or "problems" that aren't life-threatening and you know that no matter how they turn out you still have the basics covered.
no subject
Date: 2012-07-17 10:27 pm (UTC)There is no question that basic deprivation is an especially bad form of suffering. It is also true that many people live on much less than the poorest Americans, in the material sense, but still live in an environment where they are "well off". The actual direct cost of preventing deprivation is only a few dollars a day. So there is a big gap here in transforming material wealth to security; if 10x of "efficient" sustenance does not bring security, how is 20x going to help? The answer: it doesn't, because it's a pattern of relations that is at fault, not a lack of access to materials.
A subsidy based system provides a basic level of stability that does more than just buy the necessities, it also ultimately improves the efficiency with which money can be turned into secure housing, secure food, and secure relationships. You can experiment with things like living in an RV in Nevada for a while, or what have you, because there is limited risk of catastrophe. You can risk unemployment to try a different job, and not be penalized for it. It helps un-stick the things that get people stuck in poverty.
I mean, I realize this is all a bit speculative but this is actually how I think it would work out. Aside from the well known miseries of poverty, I've also known people who can live on very little while their lives are very rich. It seems the most pressing issue is to figure out how it is that some people can do more with less, and create an environment that's conducive to that. I happen to think that by combining up-front redistribution with libertarianism, this model helps create that.
no subject
Date: 2012-07-17 10:38 pm (UTC)What are the self reenforcing habits you're thinking of?
no subject
Date: 2012-07-17 10:53 pm (UTC)The first thing that comes to mind is future discounting, which people do at every level because (in general) they have lived insecure lives. So if you have money you spend it NOW. If you can borrow but have no idea how to repay it, you borrow. Net worth is worthless. Related to this is just straight-up impulse control, which is essentially biological. Again "don't do that" is wildly ineffective because future discounting is completely embedded into the poverty relationship and defying it is locally non-optimal and risky. (i.e. you can't reasonably save money if you think someone is likely to steal it.)
Someone wrote a controversial article on the habits of poverty, but I cannot find it right now. As it happens I have to run out to Lake County to see one of the numerous poor people I am currently helping to support. :-Z
no subject
Date: 2012-07-17 11:06 pm (UTC)It gets harder and harder as you get older, to the point where eventually no amount of financial security would make any diff; you just stay drunk until it kills you.
Here's another one: to poor people, rich people are the enemy. But to become wealthy, you have to see rich people as friendly, or at least your own kind. I've found it pretty much impossible to make that transition in most cases.
no subject
Date: 2012-07-17 07:14 pm (UTC)9600 $/a would be a rather meager living, even for me, but it would replace most of my Social Security, so that, added to my TIAA-CREF & other savings, it would be adequate. I suppose most people would continue to save independently for their old age, and the ones who hadn't done so would scrape by -- assuming that healthcare was socialized.
A question about such schemes that has amused me is their effect on the labor market. One would expect the wages of the best jobs to sink, because the workers in them would be taking some of their pay in the fun they were having. Employers might well find that investment in making jobs pleasant was cost-effective in comparison with high wages.
no subject
Date: 2012-07-17 07:29 pm (UTC)